Quant MF ups IT exposure as sector enters ‘neglected territory’; sees crude correction

Quant Mutual Fund has increased its exposure to IT Services companies over the last two months, saying the sector was entering “neglected territory”. At the same time, the fund house’s Predictive Analytics framework is expecting a gradual correction in crude oil prices over the next few months, which it views as a constructive development for Indian equities.

The fund house in its monthly release said that, “In the last two months, we have increased our exposure towards IT Services companies, as they were entering neglected territory and currently, our Predictive Analytics is advocating a gradual correction in crude over the next few months, a constructive development for Indian equities.”

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Sandeep Tandon led Quant Mutual Fund said its portfolio construction is focused on stocks that are under-owned, under-researched, under-valued and in neglected areas of the market. Against this backdrop, it increased exposure to IT Services companies in the last two months as the sector was entering neglected territory.

Commenting on outlook for crude oil, the fund house said that its Predictive Analytics framework had earlier identified an attractive risk-reward opportunity when WTI crude corrected towards US$72 per barrel. Quant said it entered the trade at that point, following which crude rebounded towards US$90 per barrel. For the coming months, however, the framework is advocating a gradual correction in crude prices and this could be a constructive development for Indian equities, the fund house said.

The fund house said valuation dispersion across sectors continues to widen which is creating opportunities for active managers who can move capital dynamically rather than remain constrained by benchmarks.

In its monthly release, the fund house also said it remains constructive on energy, large infrastructure, select NBFCs, asset management companies (AMCs), select private sector banks, hotels, pharmaceuticals, telecom and data centre themes. It remains underweight on manufacturing companies because of uncertainty related to input costs and supply chains.

Quant MF said India’s limited direct participation in the global AI infrastructure build-out and its over dependence on high-value imports such as oil and gold have weighed on certain expectations. However, it believes India’s structural strengths, including improving trade relationships, domestic demand and long-term capital inflows, continue to position the country favourably over the coming decade.

The fund house also pointed to improving trade relationships, including the UK’s Comprehensive Economic and Trade Agreement with India, which officially started on July 15, 2026. It said another trade agreement with the US is close to finalisation and could improve India’s terms of trade with the Western world. Quant expects the trend of capital inflows to accelerate in the near to medium term and believes that the upcoming decade belongs to India.

Quant expects markets to consolidate for a period of time, with stock-specific opportunities in the micro-, small- and mid-cap segments driving alpha generation. It said this environment makes it important to remain agile with portfolio allocation. The fund house said its multi-asset, multi-manager structure allows it to act across a broad range of asset classes under different market scenarios.

Quant’s outlook also highlights the growing focus on artificial intelligence. The fund house said its Behavioral Analytics framework is identifying opportunities in the “anti-AI” trade after the strong focus on AI since April 2026.

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It believes India, being relatively away from the crowded AI trade, is poised to outperform. Quant added that widening valuation differences across sectors could create opportunities for active managers capable of dynamically moving capital.

Quant said periods of elevated uncertainty can create wider opportunities for disciplined active investing and reiterated its focus on adapting portfolios as data evolves while remaining focused on long-term wealth creation.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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